Accumulate Dalmia Bharat; target of Rs 2117: Prabhudas Lilladher

Prabhudas Lilladher's research report on Dalmia Bharat

Dalmia Bharat (DALBHARA) reported a decent operating performance in Q4FY25, led by a sharp sequential volume recovery (28%) driven by government spending and pent-up demand post the festive season. Average NSR improved by just 1.1% QoQ, as the decline in prices in the Southern region offset the uptick in prices in the Eastern region. As per mgmt., all-India average prices increased by Rs10–15/bag in April compared to the average Q4FY25 price, which should aid H1FY26 earnings. Lower operating costs aided by strong operating leverage, negated the impact of weak pricing during the quarter.

Outlook

We expect revenue/EBITDA/PAT CAGR of 15%/26%/24% over FY25-27E. At CMP, the stock is trading at 11.8x/10.3x EV of FY26E/FY27E EBITDA. We maintain ‘ACCUMULATE’ rating with revised TP of Rs 2,117 (Rs2,003 earlier) valuing at 11x EV of Mar’27E EBITDA.